Feb 3 (Reuters) - Tesla's electric-vehicle

registrations in California fell about 12% last year, according

to industry data, indicating mounting challenges for the

automaker in the key U.S. market.

While high interest rates, tough competition and the

introduction of a restyled Model 3 sedan hurt the EV maker's

sales in California, the loss of business was likely exacerbated

by CEO Elon Musk's involvement in the U.S. election.

"Things aren't looking so golden for Tesla in the Golden

State. Tesla's dominance in the electric-vehicle market

continues to falter as the brand reported its fifth consecutive

quarterly registration decline," California New Car Dealers

Association said in a report published on Jan. 31.

Still, the Model Y crossover continued to be the top-selling

vehicle in the state, with about 129,000 units sold last year.

The Model 3 sedan was a distant second, with around 53,000 cars

delivered.

Sales of the Model 3 fell about 36% from a year earlier,

according to data sourced by the industry body, which was first

reported by Bloomberg News earlier in the day.

Tesla's global deliveries fell for the first time last year,

pressured by high borrowing costs and competition from Chinese

and European automakers.

Reuters exclusively reported in November that Donald Trump's

transition team was planning to kill the $7,500 consumer tax

credit for EV purchases as part of broader tax-reform

legislation.

If the Trump administration scraps the federal tax credit

for EV purchases, California may introduce state tax credits

under a new proposal and Tesla's EV likely would not qualify for

the incentives, Governor Gavin Newsom's office had then said.